Rawlings, Inc During January, 26,750 Units Were Completed and Transferred to the Mixing

question 35

Multiple Choice

Rawlings, Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the Mixing Department. Information for the Mixing Department for January follows: $\begin{array}{lr}\text { Work in process, January } 1: & \\\text { Units (35\% complete) } & 7,500 \\\text { Direct materials } & \$ 36,000 \\\text { Direct labor } & \$ 45,000 \\\text { Overhead } & \$ 15,000\end{array}$ During January, 26,750 units were completed and transferred to the Molding Department. The following costs were incurred by the Mixing Department during January: $\begin{array}{lr}\text { Direct materials } & \$ 133,050 \\\text { Direct labor } & 180,000 \\\text { Overhead (applied) } & 45,000\end{array}$
The cost of January's ending work in process for the Mixing Department using the FIFO method is

• A)$26,250.
• B)$50,400.
• C)$63,000.
• D)none of the above.

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Definitions:

Price Competition

A market situation where businesses attempt to outdo competitors by offering goods or services at lower prices.

Product Differentiation

The method of differentiating a product or service from competitors, aiming to make it more appealing to a specific target audience.

Low Entry Barriers

Conditions that make it easy for new competitors to enter an industry, typically leading to increased competition.

Collusion

A non-competitive, secret agreement between rivals to limit competition, set prices, or control market shares.